Managed services is the practice of outsourcing on a proactive basis certain processes and functions intended to improve operations and cut expenses. It is an alternative to the break/fix or on-demand outsourcing model where the service provider performs on-demand services and bills the customer only for the work done.

Under this subscription model, the client or customer is the entity that owns or has direct oversight of the organization or system being managed whereas the Managed Services Provider (MSP) is the service provider delivering the managed services. The client and the MSP are bound by a contractual, service-level agreement that states the performance and quality metrics of their relationship.

In the information technology area, the most common managed services appear to evolve around connectivity and bandwidth, network monitoring, security, virtualization, and disaster recovery. Beyond traditional application and infrastructure management, managed services may also include storage, desktop and communications, mobility, help desk and technical support. In general, common managed services include the following applications